BMCC - Healthcare Sector Report 2018/2019

BRITISH MALAYSIAN CHAMBER OF COMMERCE Malaysian Industry Report 2018 / 2019

HEALTHCARE

ABOUT THE BRITISH MALAYSIAN CHAMBER OF COMMERCE

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stablished in 1963, the British Malaysian Chamber of Commerce (BMCC) has been driven by the sole ordinance of advancing bilateral trade relations between the United Kingdom and Malaysia. Over the past five decades, the BMCC has been a catalyst in providing Malaysian-based businesses with networking and exposure, knowledge exchange and bilateral trading support services. Today, the BMCC has firmly rooted itself as one of Southeast Asia’s most prolific Chambers.

The BMCC is appointed by the UK’s Department for International Trade (DIT) to become their service delivery partner for British SME’s seeking to export or establish a presence in Malaysia. Embodied by dedicated sector specialists, the BMCC TRADE TEAM provide a range of customised services from market intelligence, business matching and event management to sourcing assistance of UK goods and services.

The BMCC TRADE TEAM works with UK exporters focusing primarily on SMEs in offering bilateral trade assistance, serving principally as a one-stop platform providing a soft landing for UK firms in Malaysia through market research and knowledge exchange, legal and regulatory systems guidance, connecting clients or distributors, and risk management.

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This report serves as a preliminary introduction that highlights key features and factors relevant to the Professional Services sector in Malaysia.

Information included in this report is the original work and property of the British Malaysian Chamber of Commerce (BMCC) and its department the Trade Team and is subject to copyright. No illustrations, photographs, graphics or text included in this report should be copied, reproduced or shared without prior written consent of its owner.

Whereas every effort has been made to ensure that the information given in this document is accurate, the British Malaysian Chamber of Commerce nor its Departments (Trade Team) accept liability for any errors, omissions or misleading statements, and no warranty is given or responsibility accepted as to the standing of any individual, firm, company or other organisation mentioned. © British Malaysian Chamber of Commerce Berhad 2018

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UNDERSTANDING MALAYSIA’S HEALTHCARE SECTOR Located in Southeast Asia, Malaysia is a federal constitutional monarchy consisting of two regions, Peninsular and East (Borneo) Malaysia, seperated by the South China Sea. Malaysia is known to be one of the most diversely congenial polyethnic and mutlti-cultural countries in the world.

Population: 32 Million Ethnicities: Malay, Chinese, Indian Currency: Malaysian Ringgit (MYR) Ease of Doing Business: Rank 24 Average GDP Growth: 5 - 5.5% 2018 Healthcare Budget Allocation: MYR 26.58 billion

V iewed as a priority to the Malaysian economy, the government has prioritised health- care spend-

ing, injecting RM23bn (US$5.2bn) into healthcare in 2016 – approximately 10% of the annual budget. According to the Ministry of Health (MoH), healthcare was the fastest-growing industry between 2000 and 2009 and thus recognised as a key driver of economic growth. In 2010, the Economic Transformation Programme (ETP) was established to transform Malaysia into a high-income economy by 2020. Under this initiative, healthcare was identi ed as one of 12 National Key Economic Areas (NKEA) to receive substantial government support and initiatives.

The Healthcare NKEA focus- es on encouraging areas of public-private collaboration and attracting investment in key manufacturing and service industries. This is being driven by seventeen Entry Point Projects (EPPs), which are expected to create 181,000 new jobs by 2020. These projects are wide-ranging, from fostering a homegrown pharmaceutical industry, to establishing a range of care services for the elderly, to constructing a ‘world-class campus for healthcare and bioscience’.

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INTRODUCTION

Malaysia has built its reputation as a developing nation for the past several years to be a preferred healthcare destination not just for the citizen but also the world. The nation of over 30 million people has branded itself as an attractive healthcare destination with world-class quality healthcare, affordable healthcare services and easy accessibility for every walks of life as one of the main pulling factors to attract patients from all over the world especially from the ASEAN neighbours.

Hailed by the UN Development Programme as a shining example for other developing countries, it is not a surprise that with all the attractions due to its quality and excellence, Malaysia has been receiving many recognitions by internationally recognised health establishments, which includes ‘Travel Council of The Year’ awarded to Malaysia’s Health Tourism Council by Frost & Sullivan Asia Pacific Healthcare Tourism Award 2016, the ‘Medical Travel Destination of the Year’ by International Medical Travel Journal’s at Medical Travel Awards 2017 for the third consecutive year, ranked 6th as the ‘Best Retiree Healthcare on the Planet’ by International Living for 2017 and ranked 1st out of 4 countries with the ‘Best Healthcare in the World’ for 2017 by the International Living, beating Costa Rica, Colombia and Mexico. These are just some of many other achievements by Malaysian health industry.

As far as growth is concern, the nation has been experiencing a steady growth since 2013, having seen an uptrend in 2012 when the domestic healthcare market was valued at USD 2.25b and estimated to grow to USD 3.65 billion in 2018 at an annual growth rate (CAGR) of 8.4%. The growth was parallel with the Asia Pacific healthcare market which was worth at USD 269.9 billion in 2012 and was expected to reach USD 752 billion in 2018, growing at a CAGR of 12.8%.

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The size of the Medical Device market in Malaysia is recorded to be around RM 4.5 billion with a projected growth rate of 6.5% whereas the pharmaceutical market size is estimated around RM 9.3 billion with a projected growth rate of 8%.

Malaysia that promotes FDI and DDI in both medical device and pharmaceutical industries have showed about 30% of the total medical devices manufactured by local and FDI companies is imported mostly from US, Singapore, Germany, Japan, China and Korea Republic, France, Australia and the UK.

Deemed crucial for the wellbeing of the nation, Malaysia has always put healthcare as a priority for its continuity in growth and it is clearly portrayed in the budget 2018 as well as the continuous Economic Transformation Programme that was established back in 2010 to transform Malaysia into a high income country by 2020 in which healthcare was identified as one of 12 National Key Economic Areas (NKEAs) to receive substantial government support and initiatives in grants. Several key projects were identified and it is continued to be supported and nurtured until now.

Many major international healthcare players have chosen Malaysia as their home simply because of the attractiveness of the tax incentives depending on the characteristics of the investment in services, manufacturing, R&D etc. in which a company can enjoy up to a period of 5 to 10 years tax exemption. This coupled with many other factors including readiness of highly skilled workforce available among the locals, political stability, geographical strategy in the middle of ASEAN which connects between east and west has always been a major pulling factor for the likes of Bayer, Pfizer, GSK, Abbott, B.Braun and Teleflex just to name a few.

As the trend continues for the past several years, the Malaysian government has maintained the continuous support towards providing a steady increase in providing budget towards healthcare when it was announced that RM 26.58 billion which is 10% from the total RM280.25 billion available and RM 1.7 billion increase compared to what have been received in the 2017 budget.

Source:

The budget is an indication of the Government prioritizing the welfare of the rakyat as consumables and medical supports has always been subsidized at any government medical hospitals or clinics apart from the constructions of more new hospitals and clinics as well as upgrade works at existing government health establishments.

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GOVERNMENT SECTOR Healthcare in Malaysia operates on an efficient and widespread two-tier system, consisting of a government-run universal healthcare system that serves Malaysian citizens, and a co-existing private healthcare system that caters to citizens and international patients alike.

Since independence, number of government health hospitals and clinics have increased to cater the need of 30 million population of the country including foreign workers that heavily depending on this system that has been serving for the past 61 years. It is recorded now Malaysia have 139 public hospitals, 2835 government health clinics, 180 Klinik 1 Malaysia and 660 government dental clinics.

Kuala Lumpur Hospital is one of Malaysia’s oldest hospitals. Founded in 1870, it is government-owned and serves as the flagship hospital of the Malaysian publich healthcare system. The government tertiary referral hospital is located on 150 acres of prime land in the city with 84 wards and 2,300 beds, making it one of the largest hospitals in the world.

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PRIVATE SECTOR It is now recorded that Malaysia already has 41 private and semi-private health establishments not including private owned clinics. Among the popular ones in this country is KPJ healthcare which is the biggest private healthcare establishments in Malaysia.

Private healthcare facilities which became the members of MHTC are equipped to assist international patients with extensive support services, such as international liaison with patients’ primary caregivers, assistance with visa extensions for medical purposes, arranging for translators, local logistic arrangements and much more.

Columbia Asia is an international private healthcare company incorporated in Malaysia in 1996. Columbia Asia offers 28 medical facilities (hospitals/ clinics/extended care facilities) across Asia with 11 in Malaysia. Columbia Asia Sdn Bhd is 30% owned by the Employee Provident Fund (EFF) and 70% by a US-based fund, the International Columbia USA LLC (ICU), which comprises over 150 individual and institutional investors.

Leading the way in private healthcare trends, Columbia Asia offers optimum and affordable medical services through its hospitals and clinics. With modern amenities and highly trained doctors and nurses, these hospitals are located in residential areas, making quality private healthcare more accessible and efficient for patients.

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MEDICAL TOURISM

Since the establishment of the Malaysian Heathcare Tourism Council in 2009 that is mandated by MOH to raise Malaysia’s profile as the world’s top of mind destination for world class healthcare services, Malaysia has become one of the preferred places for healthcare and in 2016, it was recorded an estimated of 900,000 visitors and a revenue exceeding RM1 billion on hospital charges alone. In 2017, the revenue have increased to RM 1.3 billion and incidental spending outside of hospital is nearly RM5 billion in expenditure on transportation, hotel, food and shopping.

Recently, Malaysia was crowned ‘Medical Travel Destination of the Year’ for the third consecutive year at the International Medical Travel Journal’s Medical Travel Awards 2017. Malaysia also ranked first as the ‘Four Countries With The Best Healthcare In The World for 2017’ by the International Living, beating Costa Rica, Colombia and Mexico. Futhermore, Malaysia ranked sixth (out of 10 countries) as the ‘Best Retiree Healthcare On The Planet for 2017’ by the International Living (Mexico, Panama, Ecuador, Costa Rica, Colombia and Malaysia).

To date, there are 78MHTC Partner Hospitals, 20 of which represent MHTC Elite Partners, the most premier private hospitals in Malaysia. Many of these hospitals have multiple prestigious international awards, not only for the delivery of world-class treatments, but also for stellar healthcare services. Some of these awards include “International Hospital of the Year” for Sunway Medical Centre at IMTJ’s Medical Travel Awards 2016 and 2017, “Patient Care Hospital of the Year” for Ramsay Sime Darby Health Care at the 2016 Frost & Sullivan Asia Pacific Healthcare and Tourism Awards, and “Paediatrics Service Provider of the Year” for Prince Court Medical Centre by the 2016 Global Health & TravelConsumer Choice Awards, amongst many others.

According to MHTC, the top 5 countries of health visitors seeking healthcare in Malaysia in 2016 are Indonesia, China, India, Japan and United Kingdom.

The country’s successes through Malaysia Healthcare Travel Council (MHTC) on the global healthcare travel stage were also recognized. MHTC was awared as ‘2016 Frost & Sullivan Asia Pacific – Travel Council of the Year’ at the 2016 Frost & Sullivan Asia Pacific Healthcare and Tourism Awards, among many others.

These awards are testament to the dedication and commitment towards excellence by the country’s healthcare players. With top-notch private hospitals, ambulatory care centres and other private healthcare facilities providing top quality, safe and effective treatments in comfortable surroundings with ease of access and affordable prices, Malaysia has certainly become the preferred destination for medical tourists seeking quality healthcare treatments abroad at competitive prices, particularly in South-East Asia.

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Private healthcare facilities which became the members of MHTC are equipped to assist international patients with extensive support services, such as international liaison with patients’ primary caregivers, assistance with visa extensions for medical purposes, arranging for translators, local logistic arrangements and much more.

Source 2017:

REGULATORY ENVIRONMENT Malaysia offers top-quality healthcare services, thanks to stringent regulations and standards for safety and quality set by the Ministry of Health Malaysia (MOH), benchmarked against the highest standards in the world. In addition, Malaysian healthcare professionals are highly skilled, having received training from renowned institutions around the world, operating in stateof-the art facilities.

Malaysian healthcare institutions are accredited by the Malaysian Society for Quality in Health (MSQH), whose vision is to advocate, promote, and support continuous quality improvement and safety in the Malaysian healthcare arena.

Moreover, several Malaysian private healthcare institutions also hold accreditation from trusted international agencies, such as the Joint Commission International (JCI), which is considered the gold standard in global healthcare, as well as International Society for Quality in Healthcare (ISQua).

Started in 2013, under the control of Medical Device Authority, Malaysia has established more stringent measures for all medical devices either manufactured or imported to the country. The formation of Medical Device Act 2013 have mandated all medical devices manufactured, imported or sold in Malaysia required to be registered. This measures are not meant to create a blockade for healthcare players but rather to protect patients and other customers from substandard and unapproved medical devices. This in fact showcases the seriousness of Malaysia towards becoming a reliable producer of medical devices in the global market and consequently attracting more FDI with increased market confidence and enable more locals to join venture with foreign players.

Just like medical device which are highly supervised by MDA, Drug Control Authority under the National Pharmaceutical Control Bureau overlooks and regulates the production, import and sales of pharmaceutical products in the country including traditional medicines. As of November 2015, a total of 264 Pharma premises with GMP certification are registered with the DCA. Pharma products containing scheduled poisons, OTC drugs, traditional substances or veterinary products are among the required ones to be registered.

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KEY STAKEHOLDERS Organisation

Overview

Ministry of Health (MOH) Plans,regulates and enforces all matters relating to healthcare in Malaysia

+603-8000 8000 www.moh.gov.my

Medical Device Authority Full control in assessing and providing certifications for all medical devices manufactured and imported in Malaysia

+603-8892 2400 www.mdb.gov.my

National Pharmaceutical Regulatory Agency Overlook, asses and provide certifications to any drugs manufactured and imported to Malaysia Malaysian Healthcare Tourism Council MHTC functions to facilitate the overall development of the Malaysian healthcare travel industry, by coordinating industry collaborations and building valuable public-private partnerships at home and abroad Malaysian Medical Association Enhancing capabilities and quality within the healthcare sector and participating in medical education along with advocacy efforts

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Contact

+603-7956 7075 www.npra.moh. gov.my

+603 2267 6888 www.mhtc.org.my

+603-40411375 www.mma.org.my

CONTACT US For any inquiries please contact the BMCC Trade Team: Tel: +60(0)3 2163 1784 / 1786 Email: info@bmcc.org.my Web: www.bmcc.org.my

E04C0, 4th Floor East Block Wisma Selangor Dredging 142-B Jalan Ampang 50450 Kuala Lumpur

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